In Massachusetts, there is one sales tax rate because local sales tax is not allowed. It doesn’t matter if you shop in Boston, Worcester, or Springfield. The sales tax rate will always be the same.
When you purchase a product in Massachusetts, the seller collects the sales tax, and then pays it to the Department of Revenue.
Massachusetts Sales Tax rates
Because Massachusetts does not have local sales tax, the state sales tax is a flat 6.25 percent. This is a simple system compared to some other states with additional county and city taxes. Here’s how other states compare:
This simplicity makes compliance easier for businesses compared to states with layered state and local sales taxes.
What Items Are Taxable in Massachusetts?
Most tangible personal property sold at retail is taxable unless specifically exempt.
Common taxable items include:
- Furniture and home goods
- Electronics and appliances
- Clothing over $175 per item
- Prepared meals and restaurant food
- Alcoholic beverages
- Software and digital products (in many cases)
Massachusetts also taxes certain telecommunications services and short-term rentals, which surprises many taxpayers and business owners.
Is Clothing Taxable in Massachusetts?
Yes, but with a key exemption. Massachusetts exempts clothing items priced at $175 or less. Any amount above $175 is taxable at 6.25%.
Example:
- Jacket costs $150 has no sales tax
- Jacket costs $200 has tax applies to $25 only
This partial exemption makes Massachusetts one of the more consumer-friendly states for everyday clothing purchases.
What Is Exempt From Massachusetts Sales Tax?
Massachusetts provides broad exemptions designed to reduce the tax burden on necessities and nonprofits.
Common sales tax exemptions include:
- Groceries and unprepared food
- Prescription medications and medical devices
- Newspapers and periodicals
- Residential heating fuel
- Educational materials
- Sales to nonprofit organizations (with proper certification)
Businesses must collect and keep valid exemption certificates to avoid penalties during audits.
Are Services Taxable in Massachusetts?
Most services are not taxable, but there are important exceptions. Taxable services may include:
- Telecommunications services
- Data processing services
- Prewritten (canned) software
- Certain repair and installation services tied to taxable goods
This hybrid approach means service-based businesses must carefully evaluate whether their offerings trigger sales tax obligations.
Who Needs to Collect Massachusetts Sales Tax?
Any business with a sales tax nexus in Massachusetts must register and collect sales tax.
You generally have nexus if you:
- Operate a physical location in Massachusetts
- Have employees or contractors in the state
- Store inventory in Massachusetts
- Exceed economic nexus thresholds through online sales
Remote sellers and marketplace facilitators may also be required to collect sales tax, even without a physical presence.
How Do You Register for a Massachusetts Sales Tax Permit?
Businesses must register through MassTaxConnect, the state’s online tax portal.
The registration process includes:
- Creating a MassTaxConnect account
- Registering for a sales and use tax certificate
- Receiving authorization to collect sales tax
- Filing returns and remitting payments electronically
Failure to register before collecting tax can result in penalties and interest.
How Often Do You File Massachusetts Sales Tax Returns?
Filing frequency depends on your sales volume.
Returns and payments are due on the 20th day of the month following the reporting period.
What Happens If You Don’t Pay Massachusetts Sales Tax?
Unpaid sales tax is treated seriously because businesses collect it on behalf of the state.
Consequences may include:
- Interest on unpaid balances
- Late filing and late payment penalties
- Sales tax audits
- Personal liability for business owners
- Collection actions by the DOR
Because sales tax is a trust fund tax, errors can create personal financial exposure for owners and officers.
Do Nonprofits Pay Sales Tax in Massachusetts?
Nonprofits may qualify for sales tax exemptions, but exempt status is not automatic.
To be exempt:
- The organization must apply and receive approval from the DOR
- Purchases must be used for exempt purposes
- Sellers must receive valid exemption documentation
Nonprofit managers should review exemption rules carefully to avoid compliance mistakes.
How Can Businesses Stay Compliant With Massachusetts Sales Tax?
The best way to avoid problems is proactive compliance.
Best practices include:
- Reviewing product taxability regularly
- Tracking nexus across states
- Keeping exemption certificates organized
- Filing returns on time
- Consulting with a sales tax professional for complex transactions
This is especially important for e-commerce sellers, SaaS companies, and multi-state businesses.
Do You Need Help With Massachusetts Sales Tax?
Massachusetts sales tax rules can become complex quickly, especially for growing businesses, nonprofits, and high-net-worth individuals with multiple income streams.
A qualified tax advisor can:
- Identify nexus exposure
- Review exemption eligibility
- Handle registrations and filings
- Resolve DOR notices or audits
- Reduce penalties and compliance risk
If you’re unsure whether you’re collecting, filing, or paying Massachusetts sales tax correctly, professional guidance can save time, money, and stress.
Frequently Asked Questions About Massachusetts Taxes
What is 7% tax in Massachusetts?
There is no 7% statewide tax in Massachusetts. The Massachusetts sales tax rate is 6.25%, and the state does not allow local sales taxes, so the rate never increases beyond that.
People often confuse Massachusetts with nearby states like New Jersey (6.625%) or Connecticut (6.35%), or mistakenly round up the rate.
What is the VAT rate in Massachusetts?
Massachusetts does not have a VAT (Value-Added Tax). The U.S. tax system uses sales tax instead of VAT, meaning tax is charged only at the final point of sale, not at each stage of production. In Massachusetts, the sales tax rate is 6.25%.
How much tax do you pay on $200,000 in Massachusetts?
For Massachusetts state income tax, most income is taxed at a flat 5% rate.
- $200,000 × 5% = $10,000 in Massachusetts state income tax
This does not include federal income tax, payroll taxes, deductions, or surtaxes that may apply to specific income types like short-term capital gains.
How much tax do you pay on $100,000 in the USA?
The total tax on $100,000 in the U.S. depends on:
- Filing status
- State of residence
- Deductions and credits
- Income type (wages vs. investment income)
On average:
- Federal income tax: $14,000–$18,000
- Payroll taxes (Social Security & Medicare): $7,650
- State income tax: varies (0%–10%+ depending on state)
In Massachusetts, state income tax alone would be $5,000 on $100,000 of taxable income.
What is the sales tax on a $30,000 car in Massachusetts?
Massachusetts charges 6.25% sales tax on vehicle purchases.
- $30,000 × 6.25% = $1,875 in sales tax
This tax is typically paid when registering the vehicle with the RMV, not at the dealership. Additional fees, such as title and registration fees, may also apply.